Investor's Corner
Elon Musk stands his ground against SEC as Tesla heads towards historic Q3
Tesla was rocked on Thursday after news emerged that the SEC has filed a lawsuit against CEO Elon Musk over his tweets last August stating that he was considering taking the company private at $420 per share, and that he had “funding secured.” As Tesla feels the fallout resulting from the SEC’s lawsuit, details of the commissions’ filing, including a failed settlement with Musk and his legal team, are coming to light.
It should be noted that Elon Musk himself is the only entity named in the SEC lawsuit, not Tesla as a company. No criminal charges against Musk have been put forward as well. Nevertheless, several of the company’s skeptics have welcomed the news. Former GM executive Bob Lutz, for one, who recently claimed that Tesla is “headed for the graveyard” since it has “no tech advantage, no software advantage, and no battery advantage” against established automakers, noted in an email to the Los Angeles Times that Musk is “toast.” The steep 9.9% drop during after-hours trading also weighed down on Tesla stock (NASDAQ:TSLA) heavily, ironically dealing damage to the company’s investors.
A report published by the Wall Street Journal outlines a rather unique set of events that led up to the SEC’s decision to file a suit against Elon Musk. According to individuals reportedly familiar with the matter, the SEC had actually crafted a settlement for Elon Musk that was approved by the agency’s commissioners. Musk’s legal team reportedly called SEC’s lawyers in San Francisco on Thursday, stating that they were no longer interested in proceeding with the settlement. With this, the SEC reportedly rushed to craft a complaint against Musk, which was filed later during the day.
The reasons behind Elon Musk’s decision to walk away from a settlement with the SEC are yet to be revealed, but by doing so, Musk has taken on what could very well be his most dangerous legal battle to date. The SEC, after all, is not only demanding that Musk pay civil penalties; the commission is also demanding that he be prohibited from acting as an officer or director of a publicly-traded company. Musk, for his part, gave a brief statement to CNBC regarding the SEC’s lawsuit against him.
“This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency, and investors. Integrity is the most important value in my life, and the facts will show I never compromised this in any way,” Musk said.
Tesla’s Board of Directors has issued a statement expressing its full support for Elon Musk. The board’s statement, while brief, emphasized that apart from standing behind the beleaguered CEO, Tesla is focused on its fundamentals, particularly the ongoing Model 3 production ramp. Following is the Telsa Board of Directors’ statement about the SEC filing.
“Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful U.S. auto company in over a century. Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders, and employees.”
Considering that he opted to walk away from a settlement with the SEC, it appears that Elon Musk is once more choosing to pursue a more difficult path forward. Such tendencies are classic Elon Musk, though past announcements from the CEO do suggest that he foresaw adverse developments coming in Tesla’s direction. In a letter to the company’s employees earlier this month, for example, Musk urged employees to stand firm and focus on meeting its ambitious and self-imposed targets.
One of Tesla’s electric car assembly lines at its Fremont, CA factory.
“We are about to have the most amazing quarter in our history, building and delivering more than twice as many cars as we did last quarter. For a while, there will be a lot of fuss and noise in the media. Just ignore them. Results are what matter and we are creating the most mind-blowing growth in the history of the automotive industry,” Musk wrote.
Elon Musk’s statement in his letter to employees does not seem to be an exaggeration. In true Tesla fashion, the company is now in the process of delivering as many of its electric cars to as many reservation holders as possible. The Model 3 production ramp, which seems to have hit its stride since Tesla managed to hit its goal of producing 5,000 units per week at the end of Q2, appears to be going strong as well. Deliveries have also increased to the point where some owners of the company’s electric cars have volunteered to help out Tesla’s delivery centers by orienting new owners with the features and functions of their vehicles.
Tesla is aiming to produce and deliver more than 50,000 Model 3 this quarter. While such a number is ambitious, even longtime skeptics of the company such as Goldman Sachs analyst David Tamberrino have noted that Tesla’s production and delivery figures for Q3 2018 would likely be within the company’s target. Tesla board member Kimbal Musk also pointed out in a CNBC Closing Bell segment that “it’s really gonna blow people’s minds how many Model 3s are gonna appear in America in just the next couple of weeks.”
Elon Musk
Tesla blacklisted by Swedish pension fund AP7 as it sells entire stake
A Swedish pension fund is offloading its Tesla holdings for good.

Tesla shares have been blacklisted by the Swedish pension fund AP7, who said earlier today that it has “verified violations of labor rights in the United States” by the automaker.
The fund ended up selling its entire stake, which was worth around $1.36 billion when it liquidated its holdings in late May. Reuters first reported on AP7’s move.
Other pension and retirement funds have relinquished some of their Tesla holdings due to CEO Elon Musk’s involvement in politics, among other reasons, and although the company’s stock has been a great contributor to growth for many funds over the past decade, these managers are not willing to see past the CEO’s right to free speech.
However, AP7 says the move is related not to Musk’s involvement in government nor his political stances. Instead, the fund said it verified several labor rights violations in the U.S.:
“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”
Tesla made up about 1 percent of the AP7 Equity Fund, according to a spokesperson. This equated to roughly 13 billion crowns, but the fund’s total assets were about 1,181 billion crowns at the end of May when the Tesla stake was sold off.
Tesla has had its share of labor lawsuits over the past few years, just as any large company deals with at some point or another. There have been claims of restrictions against labor union supporters, including one that Tesla was favored by judges, as they did not want pro-union clothing in the factory. Tesla argued that loose-fitting clothing presented a safety hazard, and the courts agreed.

(Photo: Tesla)
There have also been claims of racism at the Fremont Factory by a former elevator contractor named Owen Diaz. He was awarded a substantial sum of $137m. However, U.S. District Judge William Orrick ruled the $137 million award was excessive, reducing it to $15 million. Diaz rejected this sum.
Another jury awarded Diaz $3.2 million. Diaz’s legal team said this payout was inadequate. He and Tesla ultimately settled for an undisclosed amount.
AP7 did not list any of the current labor violations that it cited as its reason for
Investor's Corner
xAI targets $5 billion debt offering to fuel company goals
Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.
Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.
According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.
Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.
Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.
As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.
Elon Musk
Tesla tops Cathie Wood’s stock picks, predicts $2,600 surge
Tesla’s future lies beyond cars—with robotaxis, humanoid bots & AI-driven factories. Cathie Wood predicts a 9x surge in 5 years.

Cathie Wood shared that Tesla is her top stock pick. During Steven Bartlett’s podcast “The Diary Of A CEO,” the Ark Invest founder highlighted Tesla’s innovative edge, citing its convergence of robotics, energy storage, and AI.
“Because think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI,” Wood said of Tesla. She emphasized the company’s potential beyond its current offerings, particularly with its Optimus robots.
“And it’s not stopping with robotaxis; there’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots. We just thought it’d be an investment, period,” she added.
In June 2024, Ark Invest issued a $2,600 price target for Tesla, which Wood reaffirmed in a March Bloomberg interview, projecting the stock to reach this level within five years. She told Bartlett that Tesla’s Optimus robots would drive productivity gains and create new revenue streams.
Elon Musk echoed Wood’s optimism in a CNBC interview last month.
“We expect to have thousands of Optimus robots working in Tesla factories by the end of this year, beginning this fall. And we expect to scale Optimus up faster than any product, I think, in history to get to millions of units per year as soon as possible,” Musk said.
Tesla’s stock has faced volatility lately, hitting a peak closing price of $479 in December after President Donald Trump’s election win. However, Musk’s involvement with the White House DOGE office triggered protests and boycotts, contributing to a stock decline of over 40% from mid-December highs by March.
The volatility in Tesla stock alarmed investors, who urged Musk to refocus on the company. In a May earnings call, Musk responded, stating he would be “scaling down his involvement with DOGE to focus on Tesla.” Through it all, Cathie Wood and Ark Invest maintained their faith in Tesla. Wood, in particular, predicted that the “brand damage” Tesla experienced earlier this year would not be long term.
Despite recent fluctuations, Wood’s confidence in Tesla underscores its potential to redefine industries through AI and robotics. As Musk shifts his focus back to Tesla, the company’s advancements in Optimus and other innovations could drive it toward Wood’s ambitious $2,600 target, positioning Tesla as a leader in the evolving tech landscape.
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